Top 6 Factors Influencing Costs of Software Development

‘How do I get my first software development project off the ground?‘ is a question we’ve heard many times. ‘How do I make the costs of software development go down without losing on the quality?‘ is another one we hear a lot at the workshops we provide to our clients. Finally—and this one is the most important one to answer before you start building software—our clients often ask us, “What factors influence the software development budget?“. You’ll get the answers in a minute.

We know what’s bothering you and most of our clients. High costs of software development, especially if you are only just starting. All of the risks involved. Huge spending that’s getting out of hand and budgets that grow ever larger. The constant unpredictability and a black hole of project planning which doesn’t seem to work. Maybe you simply got stuck. Does it feel like the software project you are working on won’t be a success?

Well, no need to worry. Applandeo is a development company with more than 150 successful projects to date. We know that understanding the average software development cost is crucial. This article will provide insights into the factors influencing it, helping you make informed decisions.

We counted and singled out the six areas you need to take care of to beef up your software development process.

And that will be the topic of this article. In it, we’ll go over the top 6 things you should keep in your mind when planning your custom software development solution. Get ready for an innovative and cost-saving approach to software development projects!

Read on to take back control of your software development costs and learn how to save money and make your project a success.

What You Can Do to Drive Costs of Software Development Down

Project Scope And Its Complexity

First things first. Each and every software development project begins the same way. Normally, you would start by imagining what the final version of a website or a mobile app should look like. As you do this, you start to create a list of the desired functionalities that your digital project should have, which directly impacts the cost of developing software. But what usually happens next?

You guessed it right: you end up with a list so long that you don’t know what’s important or what features are needed for the product to correspond to your initial requirements. This is a moment to pause and reflect. As you go over the list of functionalities, remember the following:

• ‘Time is money’, right. But the number of features you want to have in your project is money, too. Be careful what you wish for, because when the requirements get too high the price you’ll have to pay to your technical partner will rise exponentially. It’s highly likely that what you’re looking for is not the next Instagram, Duolingo, or any other feature-rich or heavy-weight app, with lots of AI capabilities on top (AI is a great thing, but quite costly, too. If you want to reduce your AI costs, here’s a helpful guide we have on our blog.) 
• Don’t forget that the features you’ll have implemented in the app should meet the needs of your users. Is adding way too much functionality really necessary for your clients? Less feature-packed software is cheaper, and is often more intuitive for your prospective users. 
• Each feature has a specific price, depending on what frameworks or specific technologies should be used to implement them. Moreover, sophisticated external integrations will result in a bigger budget. Are you sure you’re ready to fork out more money to implement additional payment systems or gateways (e.g., Stripe, PayPal) or to add geolocation features?
• It’s self-evident that big and complex work packages result in a much higher average software development cost. A project manager who knows their craft and knows how to turn your business requirements into successful if complex projects won’t have any issues with that but the costs, the costs, the costs… The costs will be high because, apart from implementation, PMs will also have to spend time defining the scope of work and all the proper arrangements related to it. That’s why it’s crucial to divide your project into several manageable and workable smaller tasks or subtasks and thus start with a much smaller budget.

To sum it up, keep asking yourself the following question, and you’ll be good, “Do we really need all of the stuff we listed?”.

Our Hints on the Volume of Work and Software Development Cost Estimation

• Limit the project size and how complex it is.
• Keep your eyes peeled for your prospective users. Focus on the most important functionalities that will respond to your users’ pain points, while having the biggest impact on your business and the bottom line.
• Remember the Pareto principle as it applies to functionality: 20% of the project’s features will deliver 80% of the desired impact. Focus primarily on these critical features at the start. Avoid getting distracted by adding features just for the sake of it. This approach will help keep development costs reasonably low. Our chief technology officer, Marcin Szot, is a big fan of this principle. In his experience of 15+ years developing all sorts of software for many clients, this never failed him.
• Give ready-made components a chance. We mean things like Material UI, a collection of pre-designed components developers can use to build user interfaces for web and mobile applications quickly and efficiently. Think of it as if we were using Lego blocks to build software. Some other popular advanced technologies, like the ready-to-use front-end frameworks Bootstrap, Foundation, AngularJS, React, and Vue.js, are also worth it. We know how to use these frameworks to deliver the bespoke software development services you need. Some other pre-made tools exist for developers to create software without needing to write extensive code from scratch. They contain pre-designed components like buttons, menus, or forms that you can simply ‘drag and drop’ into your project. Another benefit of going this way is that there are large communities of developers who can support you and your contractors.

Team Cooperation

The people you select for your development team are the cornerstone of getting a successful project. Their expertise is not just a cost, but an investment. The better the quality and expertise of these people you hire, the higher will be the software development cost estimation you get, directly influencing the overall project costs. This reassures you that your investment in a high-quality team will pay off in the success of your project.

There are three main things to remember then:

• Try to strike a delicate balance between your development team’s expertise level and the project cost acceptable to you. Sure, software developers equipped with a very advanced skill set will make fewer mistakes and may even deliver the project more quickly. However, the latest advances in AI and other technologies are slowly evening the playing field. If you give them a chance, you might still get your project off the ground, but you should avoid paying the high fee rate they have. You can learn how to test coding before hiring developers on our blog.
• The size of the team is essential, too. With its size, the software development pricing will grow proportionally higher. That’s why it’s worth considering delegating the project’s simplest parts to junior developers to lower the project cost. Not letting the size of the team balloon out of control is the best insurance against your development effort becoming a financial disaster.
• Bigger projects will inevitably need more coordination. Tech leads, anyone? Add them, and that’s a totally different team makeup. Additional recruitment processes for quality experts will heighten the project’s complexity and result in a bigger cost estimate.

Our Hints on Team Cooperation

• Communicate with your contractors and developers constantly. Regular checkups with your team members will bring immense value. Try to find out whether they are on the same page with you and understand your business needs to come up with adequate solutions to develop the software you need without having an unsustainably high software development cost.
• Assess the quality of your team’s communication. There are many ways to check their soft skills, so testing them beforehand is a good idea. Applandeo does employee matching and is good at assessing the soft skills of your potential team members using the innovative DISC framework. Psychological tools lead to better communication and may even reduce the stress of your team.
• Add a team lead for coordination. This person will make sure that no members of the team developing custom software for you are stuck looking for ways out of problems.

Project Management

Can you imagine a project followed through to completion without a project manager who knows his craft well? We at Applandeo can’t as well. Good project managers are there to ensure that everything fits together in your mobile or web app development project, and goes like a Swiss watch, all according to the project roadmap. You can find more about who is a project manager on our blog.

We always recommend PMs’ engagement in the projects we run in Applandeo. With our experts, you can expect stellar project management. Even the most complex project will be a success. Without them, you may expect to face the following problems:

1. Lack of work coordination—someone should be constantly on duty coordinating teamwork daily. They should also engage in shuttle diplomacy whenever conflicts or misunderstandings arise and report potential issues or blockers as they arise, with an eye on project requirements. An issue reported even a day too late is a new expense to pay. PMs are there to shield you against the consequences of any problems, and, this way, lower the software development costs.
2. Lack of understanding—think of all the times you had to postpone the launch of an important project or even a business venture simply because you and your key stakeholders hadn’t had proper communication. Important feedback not received on time. Too many channels of communication scattered across different messengers and emails. PMs know how to put it all together and come back with clear instructions and valuable insights.
3. Lack of direct hierarchy of responsibility & accountability—PMs ensure proper status reporting. It is PMs who report whether the project is ‘on track,’ ‘at risk,’ or ‘behind schedule.’ Moreover, they announce all the milestones achieved by the developers. Keeping track of proper budgeting, an ‘accounting system’ of sorts, and resource allocation is on them, too. Leave out a Project Manager, and the long-term software costs will be staggering.

Our Hints on Project Management

• Test if the Project Manager truly grasps what results your business wants to get. Do you have a specific timeframe you want to stick to no matter what? Ask them how they plan to ensure this timeframe won’t be changed. How exactly are they going to follow the budget?
• Establish a set of consistent, agreed-upon intervals at which you want to get status updates. Once every two weeks? Once a month? Do you want to be very involved in the whole process and quickly steer course when needed, checking the specific tasks? Or, maybe, you’re more interested in taking a comprehensive look at the project’s progress over a more extended period? Ensure that the status control sheets are delivered frequently, at the same time, and at agreed-on time intervals and contain the business data you require the most. Product owners and investors, like you, and higher-level stakeholders usually want a broader picture. And it’s easier to assess the costs this way, too.
• Don’t let issues’ clarifications drag on via email or other communication channels. Emails are good for comprehensive summaries and final alignments. However, for quick clarifications and ensuring you share the same vision, a call is always better than a long thread of emails with no clear ending or beginning. Save each other’s time and your money by being efficient at how you sync.\

Cooperation with External IT Providers & 3rd Party Integrations

Do you want to develop a truly successful digital product? Consider engaging with external IT providers and using third-party integrations in the software development process! Such integrations will bring immense benefits to your bottom line, improve operational efficiency, and allow you to cut software development costs.

Let the numbers speak for themselves:

• By adding such payment systems as PayPal, Stripe, or Square, your business can avoid paying for building secure payment processing systems from scratch. Stripe, for example, can save companies an estimated 30-40% in development costs—a whopping figure, and a much more pleasant cost estimate as a result.
• If you have an e-commerce business, integrating platforms like Shopify might reduce the time to market by several weeks. Just imagine slashing the cost of software development this much!
• Why look for a custom-built solution when by integrating ready-made Customer Relationship Management tools, you can reduce development costs and get immediate access to advanced features, to boot.
• What software project is possible without cloud services? Thanks to integrating such external systems as AWS, Google Cloud, or Azure, you get scalable infrastructure without the need for significant upfront investment in hardware and slash custom software development costs.

Need help with those areas of the project in which you are not an expert? Contact so-called third-party providers to ask external specialists to lend you a helping hand. Thanks to such cooperation, you’ll have your project delivered much earlier.

There are many benefits to cooperation with third-party vendors. However, you should be wary of a not insignificant risk of running substantial additional costs.

Here’s what to watch out for:

1. Delayed feedback: You can’t expect external partners to come back to you with the answers fast enough, as they themselves are large companies. This can stall your project. The time and money lost as you wait may quickly eat up the time and money you saved by choosing them in the first place.
2. Misalignment of business needs: Partners should be chosen with great care. No genuine engagement? Expect a never-ending nightmare of clarifications, which, as you correctly think, won’t lead to progress, good results, and lowered costs.
3. System reliability: If your third-party provider’s systems fail, you will have nowhere to run. You may run the risk of losing users, revenue, and reputation.

Is it all really this scary? Not if you take proactive measures to mitigate these risks.

Our Hints on External Software Integration

• Before opting for such cooperation, inquire what similar projects the supplier has already implemented and in what specific apps these were inserted.
• Review your partner’s Service Level Agreement (SLA) to understand their performance guarantees, reaction times, and sleep well.
• Check what security mechanisms your partners use to prevent potential security incidents. This will be great for risk management, lowering project complexity.

New Project or Upgrading Current Solution?

When embarking on your software project journey, you may be torn between creating something entirely new or upgrading your existing platform, especially when considering the cost of custom software development. Starting anew usually sounds like a good idea, no doubt about that, especially if getting some basic functionality is what you need.

It’s quite possible that the weight of your code became too crushing. Burying your past mistakes might feel very appealing. However, you should be mindful that partially redesigning and upgrading your current software with new features often might take slightly longer than estimated. And, obviously, the costs of software development would be much higher than would have been the case if you simply added a few tweaks here and there.

Here’s what to take into consideration:

1. When adding new features to a system developed a long time ago, you should expect conflicts between the older version of the code and the newer one.
2. There could be unexpected technical issues. You may even need to budget for specific adjustments and extend the timeframe to complete all tasks. This will generate additional costs, too.
3. Sticking with old code is risky. Outdated frameworks or libraries used in the old code may prevent you from adding new functionality. Sure, this is not the end of the world, and there are workarounds and patches that can be deployed to avoid the need to rewrite the whole app. The problem with that? The work is significantly slowed down, and the development costs rise accordingly. Security risks are also involved, as such outdated software is susceptible to attacks. If the software is not updated regularly enough, data leaks may occur. As a result, you may sustain huge losses.

Our Hints on Choosing Between a Fresh Start or Existing Systems

• Consider using the latest modern technologies to develop your software. This is bound to speed up the development significantly.
• Assess how many improvements you want to make to the current project first. Then you can decide whether it’ll be more cost-effective to add a bit of functionality to the current solution or completely rewrite. This depends on several factors and requires in-depth analysis.
• Analyze your existing code thoroughly before deciding to rewrite all the code. Here, you’ll need to think about your business goals, user expectations, security threats, industry trends, and the way similar apps function. Pay attention to the things you want to change first, your plans for the future, and the timeline to implement them.
• Be cautious when advisors suggest a complete rewrite without proper prior analysis. Or come up with an estimated software development roadmap too quickly. Was your prospective technical partner too quick to tell you whether to rewrite a project or not? This smells like someone may not have done a thorough analysis. This may cause unnecessary costs in the future, which are easily avoidable if enough time is dedicated to the analysis stage.

Maintenance Phase

Okay, imagine the following: you went through all of the stages of your project. It seems like you accomplished your goals, your website is up and running, or your mobile app is finally on the app store. It feels like the time has come to breathe a sigh of relief. Or is it?

Well, not really. You should also consider what happens after the project completion and the main software development cycle. Do you want your app or website to operate flawlessly? This will require extensive maintenance, which will cost money and result in higher costs of software development overall.

When it comes to maintenance, it’s important to remember the following:

1. Budgeting: A specific sum should be allocated for maintenance when planning the overall budget. Skip it at your peril, as this will lead to substantial excessive expenses—not a pleasant surprise.
2. The day-to-day operation of your software: Software development is much more than lines of code that will work till the end of time once appropriately written. In a way, it’s a living organism. For some unknown and unpredictable reasons everything may crash. Users may find bugs. Having a smaller development team with DevOps on standby, waiting in the wings, is one way to ensure effective maintenance and handle unexpected crashes or bugs. It’s not a requirement set in stone to have a permanent position like this. This ensures you have people ready to react when issues arise. So, you should budget for some people on your end who would swiftly jump in to respond to unexpected bugs. 
3. User support: What if you have a much bigger e-commerce platform or a similar solution with thousands of different users and many targeted clients? In this case, establishing a 24/7 service desk and creating a technical support team is a must. Hiring enough qualified and well-trained personnel to ensure smooth consultancy and care will cost a lot.
4. Continuous improvement: Another case is when you want to go beyond securing the smooth operation of your software. To make sure that there’s constant progress, you may need a separate development team dedicated solely to continuous improvement. If such a team is big enough, there will be additional costs.

Our Hints on the Maintenance Phase

• Consult with your tech partner to plan the necessary infrastructure for maintenance operations. There are some outstanding experts at software maintenance out there.
• Set up automatic system scans and allocate a few hours for monitoring and required system updates if you’re starting with basic maintenance.
• Carefully consider the team size needed to maintain your solution or provide support to your clients. Maybe you need an extended development team to help you with maintenance or software performance.

Key Takeaways: How to Make Your Software Development Project Take Off

1. Limit how much should be done and how complex the project should be.
2. Choose your software development team wisely, carefully selecting who will end up in your project to deliver the desired results.
3. Organize the project management, precisely picking who will coordinate all the work.
4. Cooperate with external providers and consider third-party integration.
5. Decide whether you need to start a new project or upgrade your current solution.
6. Think about the maintenance phase in advance and plan carefully all the actions you’ll take after the project’s completion.

Keeping the costs of software development in check is easy, if you follow the hints above and entrust the development process to a reliable tech partner. The average cost of software varies significantly: a cross platform app with multiple systems and high technical complexity may cost a lot.

Luckily for you, Applandeo is a software development company with more than 10 years of experience delivering high-quality new software at a reasonable price. Understanding various software cost factors is crucial to managing the project budget effectively. Get in touch with us to make your software development dreams come true. We’re not like other software development companies.

Do you want to get an estimate, take part in a workshop, or receive a consultation? Are you interested in hiring one of the best software development teams on the market to build custom software from scratch, audit your enterprise software or tinker with some of the existing software you have in your products? Feel free to leave us a message below, and we’ll help you minimize the cost of software development & deliver spectacular results.

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